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When it comes to marketing, a lofty entrepreneur doesn’t just create professional and purposeful marketing materials; she also tracks how her marketing efforts are performing. So, in today’s article, we’re going to look at three key marketing performance indicators that every small business owner should use; they’re the first tools a business owner should use to determine whether the marketing activities they’re investing in are paying off. (Note: The following are three performance indicators that are particularly helpful for businesses involved in marketing activities designed to generate sales or sales leads.)

#1: Change In Revenue

The easiest way to gain initial insight as to whether a marketing tactic is effective is to look at the money it’s generating. So, take a moment to review your bank statements. Compare your revenue prior to launching your marketing campaign and your revenue as of today. Here are two formulas that will be helpful:

$ VALUE CHANGE IN REVENUE = (Revenue B – Revenue A)

where Revenue A is the revenue at time “t” (an initial point) and Revenue B is the revenue at point after time “t”

% CHANGE IN REVENUE = [(Revenue B – Revenue A) / Revenue A] x 100

Looking at your calculations, is there a positive change, negative change or no change at all? What is the percentage of change in revenue? The benefit of using the dollar value and percent change in revenue as a collective marketing performance assessment tool is that it’s an easy short-term financial indicator of successful (or unsuccessful) marketing activities. Simply put: If the marketing activity is helping you to generate income that you did not previously have, it is working. The question is: How well is it really working. That’s where using additional performance indicators can be useful.

#2: Return On Marketing Investment

Another popular performance indicator is return on investment (ROI). Since we’re focusing on the effectiveness of marketing specifically, we’ll focus on a derivative of ROI—return on marketing investment (ROMI). The ROMI formula can be used to assess how much your investment in your overall marketing activities is paying off. However, since our goal is to specifically determine which marketing activities are positively contributing to your bottom line, you should use the following ROMI calculation to assess your marketing activities individually. Here’s a simple formula for calculating ROMI:

ROMI = Revenue generated from X marketing activity / by the marketing budget for X activity

Using the information generated by the activity-specific ROMI, you can determine not simply whether the marketing activity is meeting your marketing objectives but whether it is a cost-efficient means for doing so based on how you’re currently implementing it; that, in turn can help you to make a plethora of decisions. For instance, you’ll be able to decide whether you need to revise your implementation strategy to allow for increased revenue, whether it’s most feasible to budget the marketing activity on a limited basis rather than an ongoing basis and how profitable that marketing activity is compared to your other marketing activities.

#3: Profit

While indicators based on revenue from marketing activities can be good performance indicators, they’re not always the most trustworthy…not on their own, at least. Why? Well revenue-focused indicators only look at half of the picture: the money coming in from specific marketing activities. Therefore, it’s also a good idea to use profit as an additional financial performance indicator; doing so will force you to not only consider the revenue you’re gaining from your marketing but also the expenses that you are incurring to maintain the marketing activity. The best indicator of this type, in my opinion: Profit. After all, the true goal of all marketing activities is to turn a profit. To calculate the profit (net gain or net loss) of your marketing activities, use this formula:

PROFIT = Revenue generated from marketing activity X – Expenses for implementing and executing marketing activity X

Change in revenue, ROMI and profit are just a few of the more simple means of assessing how well your marketing activities are performing. There are literally dozens. So, use the methods above to start. As your marketing plan becomes more complex and your business grows, you will want to add additional performance indicator assessments. For now, these should suffice to help you make an informed decision on how well your marketing activities are working and which you should continue / discontinue.

One final note…

You will not be able to assess your marketing activity effectiveness based on objective (aka unbiased) information in the absence of tangible data (ie. financial information and marketing activity statistics). You can, however, use subjective assessments. In this case, you would set the criteria you’re going to use to evaluate each marketing activity and make your decisions based on those.

As always, if you have a marketing question that you would like me to answer, send me an email at or

Tanisha Coffey is a professional writer and marketing consultant based in metropolitan Atlanta, Georgia. She provides her services through the strategic marketing consulting, professional copywriting and independent author services firm Scribe, Etc.

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